Price and market trends: Dow VAM plant on 50% allocation

04 July 2014 10:13 Source:ICIS Chemical Business

Dow Chemical’s Texas vinyl acetate monomer (VAM) plant has put customers on 50% sales control and may be down, customers said on 27 June.

A Dow spokeswoman issued a statement saying: “We are currently troubleshooting an issue with our VAM assets and are in the process of evaluating the path forward.”

A state filing by Dow on 26 June said a tube leak in the reactor caused ethylene emissions at its 365,000 tonnes/year VAM unit in Texas City.

The filing with the Texas Commission on Environmental Quality (TCEQ) contained unclear language regarding the plant’s status but suggested that a unit had been shut down. Two sources said the plant was down and that Dow had put contract customers on 50% sales control or allocation for July. One of the sources said the plant would be down for two weeks.

Dow began a 50-day turnaround at the VAM unit in late April but has not been able to bring the plant back up fully since then. Sources have said throughout June that the unit was having problems and was still down.

Dow’s VAM problems reflect the ongoing supply squeeze that has plagued US producers this year. All five of their plants are in Texas and most in the Houston area.

Two VAM producers - DuPont (now Kuraray) and LyondellBasell – have declared force majeure, and the others have had operating issues and maintenance turnarounds.

US VAM free on board (FOB) export prices have held steady at $1,600-1,700/tonne the week ended 27 June.

By Lane Kelley